The building is leased under a long term contract and

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Unformatted text preview: building is leased under a long-term contract, and the rent is unavoidable. Phone and computer equipment is leased under a flat rate contract, but the agreement is cancelable without penalty. The annual depreciation charge on furniture and fixtures reflects a cost allocation of expenditures made in prior years. Looking for a career where your ideas could really make a difference? UBS’s Graduate Programme and internships are a chance for you to experience for yourself what it’s like to be part of a global team that rewards your input and believes in succeeding together. Wherever you are in your academic career, make your future a part of ours by visiting Download free ebooks at 11 Business Decision Logic Analytics for Managerial Decision Making * Direct labor $ 315,360 Utilities and maintenance 40,000 *Building rent 120,000 Phone/computer leasing 60,000 Pilot has been approached by Chandraof furniture and leading provider of independent tech support Annual depreciation Corporation, a fixtures 100,000 services. Chandra has offered to provide a turn-key tech support solution at $ 635,360 $12 per the rate of support event. Pilot estimates that it generates about 50,000 support events per year. Chandra’s proposal to Pilot notes thatby Chandra Corporation, a$600,000provider of independent tech support Pilot has been approached the total expected cost of leading (50,000 events X $12 per event) is less than Chandra has offered to provide for tech solution at the rate offor Pilot services. the amount currently budgeted a turn-key tech However, a correct analysis $12 per focuses only on the relevant items it generates about 50,000 support events perprovide the support support event. Pilot estimates that (following). Even if Chandra is engaged to year. Chandra’s services, building rent that the total to be incurred (it is not relevant to events X $12 The cost of proposal to Pilot notes will continue expected cost of $600,000 (50,000 the decisio...
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